Butter is rich in lipids. Digestion of fat starts in the stomach. The gastric lipase hydrolyses small amount of lipids. Bile helps in emulsification of fats and activates lipases which break down fats into diglycehdes and then to monoglycerides. Monoglycerides and Diglycerides are further broken down to fatty acids and glycerol in presence of lipase.
Fatty acids and glycerol being insoluble is converted to small droplets called micelles which are reformed to very small protein-coated fat globules called the chylomicrons which are absorbed by the intestine villi.